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CIO Concerns – 2009
With the economic turmoil that businesses will face in the coming year, technology managers will face a new level of difficulty that should seem especially tough after several recent positive periods regarding business technology. Many technology analysts are now releasing reports that summarize CIO concerns for the difficult times ahead.
Most analyst seem to agree with the opinion stated on CIO.com, which is that “CIOs who underestimate the economy and overestimate their own prowess risk losing their jobs in the coming year. And the count may be surprisingly high…they may not see the dangerous gap between how they and their bosses rate their work.”
Unfortunately, many CIOs made these mistakes (waiting too long to react and not realizing business goals) after the technology bubble burst not long ago. CIO recommends that CIO’s be proactive this time around and that “what happens to CIOs on the other side of this economic bust will be different from 2001 only if you assert yourself, don’t wait for an invitation, certainly don’t wait to be told.”
Many of these proactive moves will likely involve shifting high-risk, large-scale technology and process changes to smaller, less-riskier, and measurable technology and process improvements. Networkworld.com predicts that cuts will also include spending on consultant work, technology refreshes, and new hires. They also say that the key will be spending on process improvements. As they report, “Now is the time to take advantage of process-automation and workflow tools. They are reasonably mature, and they introduce efficiencies that ultimately save money. It is important that IT take manual processes and codify them to free up staff wherever possible.” Smart spending also may include software-as-a-service and cloud computing, which allows organizations to not have to maintain software and easily scale it as needed, since it is based on a subscription-based model.
Unfortunately, the Financial Times reports that the biggest concern for CIOs next year might be finding another job. They report that “the perception among chief information officers (CIOs) that their influence on business strategy is steadily waning, coupled with continuous and increasing pressure to cut costs. And since the main areas of satisfaction among CIOs are “having a greater involvement in business strategy and a fresh challenge,” many CIO’s may look to move on. However, greener pastures will not be easy to find in the coming year, and most CIOs will have to withstand the difficult time, be proactive (as discussed above), and lastly, “make sure projects come in on time and on budget.”
January 19, 2009 - 2:48 pm
A very apt post. Thank you for it.
There recently was an article by FT Columnist Ade McCormack about CIOs having to reinvent they look at business as well as some of the relevant themes in the current markets.
I had done some of analysis of the same and had posted on my blog here about the same.
Here is an excerpt.
Some of the emerging themes:
* It’s all about cost reduction and delivering a quick return on investment
* The role of the end user is changing as the technology industry changes
* IT talent management is a real challenge both from a quality and quantity perspective
* Cloud computing cannot be ignored, but there are issues to be resolved such as defining appropriate service level agreements
Here are some of my takes on these themes.
It’s all about cost reduction and delivering a quick return on investment:
Something the world had learned when the internet bubble burst was definitely the cost reduction and only the companies that did exceptionally well in this aspect were able to survive 2001-2002. Now things are worse, cost reduction alone won’t keep your company afloat. It is time for IT to show that adding to cost reduction, IT can be a major change agent in the industry. Concepts of cloud computing whereby Industry giants have started leasing out part of business processes or modules to cloud processing add definite strategic advantage. Such types of opportunities must be exploited. A CIO must look at how his IT organization is spending on IT infrastructure and see if his systems can be outsourced to specialized providers. Economies of scale can play a major role for these specialized providers who can give you substantial cost savings.
Not posting the whole thing here fearing clutter.
January 30, 2009 - 3:24 pm
Abdul, You highlight a good point in your comment. While a focus on measurable cost reductions is necessary in times like this, IT executives should not lose touch with the strategic potential of IT. In fact, during tough times many companies slow IT-innovation related activities, and this can present a opportunity for companies that are willing to take a chance with their IT. However, increasing IT-related risk is likely a tough sell for IT executives right now, and so it would take a strong and confident CIO to get such an initiative started.